South Korean banks are expected to shoulder snowballing corporate loan defaults in the upcoming months as a growing number of cash-starved companies are turning insolvent amid a long-protracted economic slump, industry data showed Thursday.

Keangnam Enterprises, a local major builder, has been in the red for the recent few years, posting losses of 310.9 billion won ($279.3 million) in 2013 and 182.7 billion won in 2014 due to a deep slump in the local housing market, according to the data.

The builders' creditors, led by the state-run Export-Import Bank of Korea, have poured a total of 2.2 trillion won into the company to normalize it, with an additional 230 billion won in subsidies needed to prevent imminent delisting.

Keangnam Enterprises' total capital fell less than the par value of all its stocks earlier this month due to the sizable deficits.

If the creditor banks stop injecting more money into the builder by the end of this month, the bourse operator will remove its shares from the benchmark KOSPI. Stock trading of Keangnam Enterprises has been suspended since March 11.

To make things worse, prosecutors raided its head office earlier this week on allegations that the builder was involved in a botched investment in a Russian oil project during the previous Lee Myung-bak government.

But the creditors are tepid to give more money to revive the nearly bankrupt company as they had seen 1 trillion won worth of corporate loans turn sour last year due to collapses of Dongbu Corp., a construction affiliate of the 18th-largest Dongbu Group, and Moneual Inc., a small-sized home appliance maker.

Local lenders are also on the verge of losing 1 trillion won in loans extended to KOSPI-listed Taihan Electric Wire Co., which has received a warning from the bourse operator due to impaired capital.

SPP Shipbuilding Co. and Sungdong Shipbuilding & Marine Engineering Co. have absorbed 600 billion won and 2 trillion won, respectively, from their creditors and been asked to give an additional 400 billion won each.

"We can't support these companies indefinitely as we don't know when the funding will end," said a high-ranking official from one of the creditor banks, asking not to be named. "Maintaining the bank's financial health is our top priority."

Market insiders worried that the insolvencies of mid-sized companies will likely undermine earnings of the local lenders this year, citing that the banking industry posted 800 billion won in net profit in the fourth quarter of 2014, diving from 1.7 trillion won the previous quarter. (Yonhap)